The GeoPolitics Of The Global Nuclear Landscape

James Conca
, ContributorI write about nuclear, energy and the environmentOpinions expressed by Forbes Contributors are their own.

The U.S. was the dominant force in the global civilian nuclear trade for decades, enjoying both the rewards and responsibilities that come along with that position. As pioneers in nuclear energy, the U.S. was able to develop world-class products and establish a successful export regime in the 1970’s and 1980’s. We are still making profits off of some of those earlier deals.

Figure Caption: About 70% of all new nuclear capacity coming online in the next 35 years will be in developing (non-OECD) nations, because growing demand for electricity is coupled with international commitments to cut CO2.

The U.S. government also helps other nations with regulatory, safety, security, and innovation needs - even when there is no commercial benefit. We consistently put the safety and security interests of the global community first. This is what it means to be a responsible world leader.

In recent decades, however, the U.S. has lost its edge as a global exporter. Our products have a harder time competing with all-inclusive deals offered by Russia’s state-supported industry and now face additional challenges from lower-cost Chinese clones. The U.S. needs a new policy strategy.

Russia offers all-inclusive packages for new nuclear plants—covering the cost of constructing the reactor, training employees, operating the facility and even taking back used fuel. It’s hard to compete with that without direct support from one’s government.

Russian and China have another advantage in the competition for market share—they choose not to adhere to the same standards as the U.S. and other top producers. Neither Russia nor China are members of the Organization for Economic Co-Operation and Development (OECD), which sets guidelines that discourage larger, richer countries from taking unfair advantage of emerging nations in trade and business dealings. This puts us at a structural disadvantage in the global marketplace (see figure).

Furthermore, Russian explicitly views the export of all energy resources and technologies as geostrategic tools. A good way to understand Russia’s civilian nuclear strategy is to look at the history of their oil and natural gas exports to Ukraine and the European Union via the Trans-Siberian and subsequent pipelines. Once these pipelines were established as a major source of energy for the region in the 1980’s, Russia’s influence grew exponentially.

Right now, Russia is locking-in relationships with other countries of regional importance, including Turkey and Vietnam, cutting into U.S. diplomatic efforts.

China is in an even more competitive position than Russia, because it has the cash on hand to make equity investments in large nuclear projects anywhere in the world. China is the new investor in the United Kingdom’s Hinkley Point nuclear project and may become a leading partner in the U.K’s Essex nuclear project.

China has even designed a reactor specifically for export, their CAP1400 reactor, based on the design of Westinghouse’s popular AP1000, paralleling the way China quickly overtook the global manufacture of solar panels a decade ago.

Leveraging U.S. intellectual property from companies seeking access to Chinese markets, undercutting competitors with low manufacturing costs, and later pushing U.S. producers out of the market, is the way China comes to dominate any market.

Make no mistake - China’s emergence on the nuclear scene will be swift and dominating.

The United States must decide to make civilian nuclear trade a national priority, and provide clear leadership across the many programs, offices, and agencies that will need to cooperate if we are to succeed. It is essential that we adhere to our safety principles, but we must also be nimble and efficient in order to thrive in an increasingly competitive market.

Several steps we can do to address this problem include:

- accelerate nuclear research, development and demonstration, and help to deploy small modular reactors

- designate a senior level coordinating position within the White House

- fix our Export-Import Bank that finances the export of American goods and services and makes us more competitive in the global market, like every other country has

- give U.S. vendors a variety of financing options to meet the various needs of global purchasers

- allow Congress and the Administration to consider creative ways to use existing programs, like including nuclear financing in global development efforts at U.S. AID and OPIC, and extending Department of Energy loan programs to international customers

- define nuclear as a clean energy source and ensure its eligibility for as many funding mechanisms as possible to help more countries meet their climate goals, while giving U.S. nuclear vendors a fair opportunity to compete

- look to our fellow OECD member nations for partnership and collaboration since France, the U.K., Korea, Japan, and Canada are all nuclear exporters who share our safety, security and democratic values

- encourage Russia and China to comply with OECD rules

From cell phones to solar panels, U.S. industries have pioneered countless high-value technologies that were ultimately replicated by foreign manufacturers who could undercut the cost and overtake the market with their government’s support.

The good news is, we’re well positioned to deliver these new nuclear technologies and are further along than China and Russia in developing most of them, though both countries can overtake us pretty quickly if we fail to act.

Since becoming the undisputed greatest, richest and most powerful nation on Earth in the 1980’s, the United States seems to have become complacent, almost willfully ignorant, of what it takes to remain the greatest nation on Earth. We need to be smart again.

And no other area requires smart like nuclear.

Dr. James Conca is an expert on energy, nuclear and dirty bombs, a planetary geologist, and a professional speaker. Follow him on Twitter @jimconca and see his book at Amazon.com